D.C. may use contingency fund in event of shutdown

D.C. Council members are looking to keep the city government running through a federal shutdown by paying employees with funds from the city's contingency cash reserve fund — a tactic that could avert a showdown with federal officials.

A bill circulated to council members Thursday would designate all city employees as "essential personnel," allow D.C. Council employees to work voluntarily until federal appropriations are approved and pay employees from the city's contingency cash reserve fund. Council Chairman Phil Mendelson is expected to introduce the bill at a council session Tuesday — the same day the federal government shutdown would take effect unless congressional lawmakers reach a budget deal.

As of June, the fund contained about $144 million, according to the most recent budget projections made by the District's chief financial officer. With daily city government expenses estimated by the CFO's office at between $17 million and $19 million, the fund could sustain city functions for about nine days.

Because the District is a federal enclave, its budget is tied to the federal appropriations process, leaving the District vulnerable if lawmakers in Congress fail to resolve their differences over a federal spending plan. The federal Antideficiency Act prevents federal government or city officials from continuing regular, ongoing operations except in cases of emergency involving the safety of human life or the protection. Doing so or spending unappropriated funds means employees and officials could face fines or jail time for violating the law.

But since the money in the city's contingency fund has already been appropriated by Congress, using it skirts the issue of keeping the city government open in defiance of a federal shutdown, the draft legislation states.

"It's a whole lot better this way than not having the funds to draw on. I think if there were no funds to draw on, then I think there would be some risk," said Walter Smith, executive director of the think-tank D.C. Appleseed.

Money from the fund can be used for "nonrecurring or unforeseen needs that arise during the fiscal year" and in the past has been used to pay for expenses incurred during natural disasters or for the presidential inauguration.

"In prior years, we were able through prior budgets to set aside dollars for these reserve funds so they've already been the subject of a prior congressional appropriation," Mr. Smith said.

In the event a shutdown went on longer than the contingency fund could sustain, Mr. Smith pointed to the city's emergency cash reserve fund — which contains an estimated $110 million — as another source of possible revenue. The money would be replaced in the fund once the city is again able to spend its own dollars, according to the draft legislation.

D.C. Mayor Vincent C. Gray this week submitted a contingency plan to the federal Office of Management and Budget declaring all city operations "excepted" in an effort to keep the city open even if the rest of the government is forced to shut down next week. Officials from the OMB have declined to comment on the plan submitted by the mayor. But some city officials have indicated that if the plan is rejected they would not recommend defiance of the federal government in the form of writing the checks to keep the more than 30,000 city employees at work.

Mr. Gray's nominee for chief financial officer, announced Thursday, said he would not pay employees without authorization.

"You can't do what's illegal. I'm not going to jail," said Jeffrey S. DeWitt, who must be confirmed by the D.C. Council before taking office.

Federal legislation is also pending that would prevent a city shutdown by authorizing the D.C. government to spend its local funds in the event of a federal shutdown. Similar legislation prevented the city government from shutting down during the last federal shutdown in 1995.

And whether or not D.C. officials' rebellion takes hold, there seems to be little political will on Capitol Hill to pursue punishment of any local officials who violate the law.

"The reality of how so-called shutdowns work are that, retroactively, we pay every federal employee, including the ones that stay home. So from a practical standpoint in these short-term shutdowns, there is no money being saved by sending people home," Rep. Darrell E. Issa, California Republican and chairman of the House Oversight and Government Reform Committee, told Roll Call.

"I rather doubt that Congress would take punitive actions against the District of Columbia for keeping their personnel on," Mr. Issa, whose committee would be charged with investigating the District's actions, told the newspaper.

Note: An earlier version of this report cited an outdated figure for the amount of money in the city's contingency cash reserve fund. The error has been corrected.